Hi all, FIrst post
I was hoping that someone with some experience in the area can advise me. Im very new to this so prepare for some noob questions.I have already spoken to Mortgage choice fellow and so im going to run down on what he is advising me in hope that someone can reassure me that im on the right track. I wanted a second opinion but didnt know where to go until i stumbled upon this place.
I own an apartment where i live atm, 2+1 with 2 wages. We were thinking upgrade so broker calculated this.
220K current loan
100K equity (hoping to keep the unit and rent it out)
450K price of new property
20K for stamp duty and fees
total 690K – equity is what i borrow. Rent should cover minimal repayments of the apartment.
First question is, if the loan is set up right, is this a reasonable way to upgrade and keep IP as well
second question is related to first, what would be the best way to set it up, as chain of loans or…
there was one thing that he said that got me doubting was "iwe set it up so all expenses are paid from the loan, nothing out of you pocket" which makes sense looking into his calculations but it just seems a bit too good
other advice and opinions are welcomed
told there would be some silly questions, Thanks all
Run for the hills.
The proposed structure is a lazy set up that doesn't benefit you at all.
He/she is cross collaterising your home with your investment property and is possibly contaminating your deductible and non-deductible debt.
You need to speak with a broker who knows what their doing.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
Get in touch with Jamie who has already responded to your question. He's a very knowledgeable broker held in high regard on these forums. Ditch the Mortgage Choice person and bring Jamie on board.
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
Well that was my first thought, run for the hills but we would really like to upgrade. Is there a solution then?
Hi Deen
There's no issue with upgrading – that's a possibility.
You just don't want to do it in the manner that's been proposed. It's not in your best interest.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
I'm no broker but i agree with Jamie, what you have is the lazy approach. Happened to me a couple months ago. Luckily for me the information on this forum stopped me going ahead with what my broker suggested.
The fast food approach to finance!
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
mrDeen wrote:Hi all, FIrst post total 690K – equity is what i borrow. Rent should cover minimal repayments of the apartment.
Welcome!
^ there's one of your problem…it looks like the loan is gonna be crossed and if your going for an LMI loan as well, this crossing will be a costly mistake…let alone it's the wrong loan structure in the first place from a tax point of view!
Overall you should have split loans with I/O with the ability to take your new loan to a 2nd bank ( if required).
Shoot Jamie an email and he will be happy to get you back on track in a jiffy!
Regards
Michael
Mick C | Shape Home Loans
http://www.shapehomeloans.com.au/
Email Me | Phone MeSame Banks. Better Rates. Served With a Passion.
I was hoping that someone with some experience in the area can advise me. Im very new to this so prepare for some noob questions.
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